Fortier demands aersospace business for Quebec

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OTTAWA â€” The Harper government has avoided a repeat of the 1986 CF-18 debacle by thwarting Public Works Minister Michael Fortier's efforts to increase Quebec's share of the economic benefits flowing from a $3.4-billion military purchase.

â€œThis government and our ministers have no intention of interfering in the regional distribution of the contracts,â€ Prime Minister Stephen Harper told reporters Friday afternoon.

Laying down the law, Mr. Harper said it is up to market forces to determine which companies would receive benefits flowing from the government's purchase of C-17 cargo aircraft from Boeing Co.

â€œIt depends on the company that has the contract and its relations with other industry players,â€ Mr. Harper said.

Sources said the cabinet committee on operations approved this week the main elements of a deal under which Boeing is selling four C-17s to the Canadian Forces, despite Mr. Fortier's previous objections to the deal.

A senior Conservative source added that Mr. Fortier was â€œhauled out on the carpetâ€ at the cabinet committee meeting for his efforts to boost Quebec's share of the benefits.

â€œThe view was that Fortier was getting too greedy,â€ said the source, who added that the other senior Quebec minister on the file, Industry Canada's Maxime Bernier, has taken a pan-Canadian view.

To obtain the contract, Boeing has to pledge to buy supplies and services worth the exact value of the purchase in Canada. This package of regional benefits can be spent to build or maintain the Boeing C-17s, or any other current and future Boeing aircraft.

Mr. Fortier has argued that more than half the country's aerospace industry is in Quebec, and the province deserves to win economic benefits in the 40-per-cent range from the Boeing deal.

But sources said that the benefits to Quebec will be in the 30-per-cent range, on par with Ontario. The western provinces are getting a 20-per-cent share, while the Atlantic provinces are set to receive between 5 and 10 per cent. Other benefits will touch more than one region at a time.

Overall, $550-million in benefits to Canadian businesses have been allocated, with nearly $3-billion in other benefits to flow over 20 years from the purchase of the giant cargo planes.

Politicians from outside Quebec, especially in Manitoba, where Boeing has a new facility, have resisted Mr. Fortier's push.

Conservative politicians have not forgotten the 1986 decision by the Mulroney government to award a CF-18 maintenance contract to Canadair in Quebec despite a cheaper proposal by Winnipeg's Bristol Aerospace. The decision created a huge wave of anger in the West and contributed to a split in the Progressive Conservative Party, leading to the 1987 creation of the Reform Party.

In that context, the current government's cabinet committee on operations accepted the deal signed between Boeing and the Canadian government two weeks ago in California, even if it had raised the ire of Mr. Fortier.

â€œIt's been approved,â€ a source said Friday, adding that last-minute negotiations are under way to finalize the deal by the end of the month.

The source added the government is trying to find a way â€œto help save Mr. Fortier's face,â€ and that a number of proposals are still being considered to achieve the objective.

Quebec's share of the coming benefits will not meet Mr. Fortier's goals, in large part because Boeing prefers to work with its existing suppliers across Canada rather than start business dealings with Quebec firms that are its direct competitors.

A federal official recently told The Globe and Mail that Mr. Fortier tried to obtain â€œthe maximum for Quebec.â€ A report on Radio-Canada this week said he wanted Quebec to have more than 40 per cent of the benefits and that he had recently refused to sign a deal to purchase the four planes because Boeing refused to oblige.

Manitoba Premier Gary Doer criticized Mr. Fortier's position.

â€œHis comment that â€˜I am not going to sign a contract,' well, no one died and made him prime minister. He is an unelected senator, swaggering around making inappropriate comments about matters that are in the dustbin of Mulroney history,â€ Mr. Doer told the Winnipeg Free Press this week.

Mr. Fortier's office refused to comment on the state of the negotiations with Boeing Friday, saying no deal has been signed.

With a report from Jane Taber

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Fortier, the "LaPierre" of the Conservative Party, has emerged. And he's not even elected. Maybe next time around he should actually run for a seat before he pretends that he has a right to determine what ought to go where.